One of the main selling points of Bitcoin was the fact that it had such low transaction fees. However, in 2017 Bitcoin fees began to soar and business who were so eager to adopt bitcoin as a form of purchase began to back out.
Valve, the major video gaming company, has decided to stop accepting bitcoin for their Steam platform, stating, “it has become untenable to support Bitcoin as a payment option”. Stripe was another company who decided to drop bitcoin as a payment method, stating that because of the high fees there were less and less uses for the network.
Bitcoin fees dropped to $0.79 on Sunday, which is a drastic decrease from the $34 dollar high seen in mid-December. The reason for the sharp-decrease in fees is mainly due to lower congestion of the network. When fees were at their all-time high many users decided to stop using the network, while other users decided to use the network more efficiently. Another major selling point of bitcoin network was that payments can be sent to different recipients simultaneously. When fees were basically negligible users were more careless with the use of the network causing high congestion and slowing down the network.
It’s important to look at how this may show the future of bitcoin. As Bitcoin tries to be more widely accepted it is inevitable that fees will increase, and from the last few months it shows that higher fees are likely to discourage companies from the network or have them switch to competitors like Ethereum or litecoin.